Small Business Out of Your Home Office

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The COVID-19 pandemic has upended life for people in the workforce. Now more than ever, having a successful home and office life is essential to keeping business going. With prolonged time away from the office, businesses are looking for ways to continue normal operations with a disparate workforce and no storefront or office space. We’ve compiled a few tips for optimizing your small business while you work from home.

Tip #1: Find Your Space

An integral part of every business is office space, and since working from home is now the new normal for so many people during the pandemic, it is important to have a specific place in your own home to work. This place should be separated from other family members during the day so that it feels like you are going to work at an office versus at home. That divide is helpful in ensuring that you are able to work on business ideas during the day.

Spending a lot of time working at home can be difficult, especially when you start out. Most people start working at the kitchen table, but that can lead to distractions from family members or the various comings and goings in the house. Instead, consider moving to a separate room in the house where you can have a desk and everything you need to work. 

Spreading out with a desk, phone, computer or laptop, and other office supply essentials can ensure that working from home can still be a business success. See Tip #4 for more advice on continuing as a home-based business.

Tip #2: Home Business Communication

When working together in the office, it is easy to communicate with co-workers and plan together – from short walks down the hall to other offices and conversations in the break room. But now, with a disparate workforce and no office space, small business owners will be relying on new tools to keep in touch.

  • Messaging applications like Slack and Microsoft Teams can keep business owners in touch with all employees.
  • Regular mail that is sent to the physical office should be forwarded to your home so that the flow of business remains uninterrupted. Phone lines at the office should also be forwarded to individual employees’ personal phones.
  • To keep in touch with co-workers and clients, and field potential clients, video conferencing software like Zoom, Microsoft Teams, Skype is a must for meetings.
  • Smartphones will become an essential tool for all full-time and part-time employees, including business owners, in running a successful business.

As teams work from home across cities, states, and even the country, it is important to remain connected. As a small business owner, your business plan includes employees to ensure smooth links to clients and new business.

For self-employed business owners, the tips above are still applicable.

Tip #3: E-Commerce

With a lot of people at home due to the COVID-19 pandemic, e-commerce is a growing market for all types of businesses, and many can adapt their services to the marketplace. The main goal around business ideas for e-commerce is incentivizing others (businesses, people, et cetera) who are also staying home to buy your product or service.

The rest of this tip is primarily focused on small businesses that sell products or function as product marketplaces. Google and social media can be essential now in driving visitors and customers to your website. Make sure that you can handle credit card transactions for orders and consider dropping shipping prices. These two things will incentivize customers to purchase your product and ensure that you are not holding on to inventory throughout the pandemic. If your small business primarily functions out of a storefront, you can still ship from the store and sell inventory online.

E-commerce is a great way to push your business and gain customers during the pandemic while so much of our world is online and virtual. It could also lead customers to visit your storefront when the pandemic is over and shops re-open. In the end, you may sell products and goods online while gaining new customers. Consider working remotely with a web developer if your small business does not have a website and if e-commerce is a new business plan for you, or using Wix, Squarespace, WordPress, or Shopify to design the website.

Tip #4: Keep Balance While Working as a Home-Based Business

Teamwork and communication (as outlined in Tip #2) are essential when working as a home-based business. While working at home, it is also important to maintain a healthy personal life and keep boundaries between home and home office life. Since there is not a commute at the beginning and end of the day to break up office time, it is important to set boundaries.

Working from home can also make it feel like you are always working. That is not healthy – mentally or physically – and can lead to burn out, especially in this stressful pandemic time. Make sure that you and your co-workers/employees have specified working hours each day with tasks while you work from home. Communicating with colleagues throughout the day can also ensure a balance so that no one is left doing extra work after hours.

On a similar note, while working out of a home office, your business plan may change slightly regarding your focus on clients. Because you cannot meet people in person, potential client meetings can be conducting virtually over Zoom, Microsoft Teams, and Skype. During this time, clients are still looking to hire small businesses to help, but the thing to remember is that almost everyone is working from home. Business opportunities will be available and potential clients will understand the balancing act your business is in due to remote work. Communicating with your team and balancing the workload during office hours can ensure a smooth transition to the home office and impressing potential clients during meetings.

Tip #5: Taxes and Payroll

Your home-based business will also be eligible for tax benefits from the IRS, such as the home office tax deduction. If you are self-employed and working from home, you can use this deduction, and if you regularly (and exclusively) use a home office to conduct business, you can use this deduction.  

This deduction allows you to write off items used for conducting business activities in your home like:

  • Rent
  • Utilities
  • Real estate taxes
  • Repairs
  • Maintenance

The home office tax deduction is based on how much of your home is used for your own business. When it comes time to file your taxes, you can work out what your deduction would be and apply it. The exception is that this deduction cannot be applied to temporary living situations, like hotels.

If you have coworkers working in another state during the pandemic and work from home orders, you may face unexpected tax issues when it comes to filing. As a small business owner with full-time and part-time employees, you could be subject to state income taxes, gross receipt taxes, and sales and use taxes. You will also have to be mindful of any different local labor laws. Six states follow different tax laws for telecommuting employees:

  • Arkansas
  • Connecticut
  • Delaware
  • Nebraska
  • New York
  • Pennsylvania

Businesses based in these six states that have workers who have relocated due to the pandemic may be facing a double tax from the state where their employee lives and the state where the business is based.

While running a home-based business, small business owners need to be mindful of rules from the IRS as well as state tax authorities for their business’s new home setup.

Tip #6: What About Going Back In?

As a small business owner, you are your own boss and the leader of a team. It is important to follow all COVID-19 guidelines and precautions as set out by state and local governments for returning to the office. However, it will also be necessary to check-in with your team to discuss returning to the office and the transition to a home office and remote work.

You may have decided that the real estate needed for office space is not essential any more and that your business can operate as a home-based business. Another thing to consider is the commute that many people face when going into an office. While working from home, employees may be able to use their commute time as personal or family time, making them more productive during working hours. With money saved on real estate and commuting, a home business, for small businesses and self-employed individuals, may be the low-cost route of the future.

The tips above can help any small business, and small business owner, as we all experience a prolonged time away from the office during the coronavirus pandemic. With planning and communication, all small businesses will be able to continue their daily operations at the highest possible level.

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